Interactive Widget --SPY Mimics S&P 500

Friday, December 30, 2011

2011 Wrap Up

As of mid-day, the markets are chopping around rather aimlessly, within a couple tenths of a percent of yesterday's closes.  Here is a view of 2011.

After a year of chopping around aimlessly, net gain for the SP 500 is 0.0%.  DJI is up a bit, NASDAQ down a bit.  This is a market going nowhere.  Check out the 5 year plot at Yahoo Finance, and it's a pretty similar picture, but with DJI and NASDQ reversed.  Over a five year span, the market has gone nowhere.

Look back since the beginning of the current century, and it's even worse.  (Chart snipped from Yahoo Finance, interactive chart.)

The SP500 is down over 12% over this time.  The DJI is up 6.6%, while the NASDAQ is off a whopping 32.6%.

This is where the SS privatizers want to put your retirement savings - with Wall Street rentiers skimming the cream off the top.  Of course, they will do this irrespective of your gains and losses.

And I think there are plenty of losses looming over the horizon.

Thursday, December 15, 2011

Thursday 12-15

From my view of the wave count in the SP500 index, it looks like the current small level wave down is not yet complete.  Subwave 5 of 3 appears to be under way, inching toward the 1200 Rubicon.  Not labelled, the high point at the end of trading last Friday is also a wave 2 top, at the next higher level of trend.  In fact, most of the touches since July 8 at 2's at some level. 

The Rubicon could provide some round number resistance.  The lower border of the up-slanting channel highlighted yesterday could come into play as well.  With waves 4 and 5 looming in the near future, more meanderings across the 1200 line are quite possible.

When it is finally and convincingly breached on the downside, it will be years, possibly decades, before it is exceeded again in any meaningful way.

Look out below.

Wednesday, December 14, 2011

Channels, and More Channels

A few days ago, I wondered if the early December surge in the SP 500 Index would reach the top of the trading channel.  It did.  Here's an updated look.

It touched the channel top on Dec 7, and has been dropping since.  I've outlined a few channels.  The big one originated with the July 8 peak, and its top line has been touched several times since.

The lower channel boundary is a parallel line off the August 9 bottom.  Upward activity has been within a channel made by connecting the Oct 4 and Nov 28 lows to define the bottom.  I've place the top boundary on the Aug 31 high.  Other interpretations are possible.  I like both of these channel definitions because the mid-lines seem to have some support-resistance characteristics.

I've also included a new down-sloping channel from the Dec 7 top.  This may broaden if downside activity picks up.  As things are headed, the index could break out of the up-sloping channel just about as it crosses the Rubicon, one more time.

Saturday, December 3, 2011

April - Nov 2011

Were you excited by that big end-of-the-month stock market surge this week?  Let's put it in perspective.  Here are daily closing values for the SP500 index.

Several weeks ago I put a red trend channel top line connecting the high points of 7/07 and 10/28.  A parallel channel bottom extends from the 8/08 low.  A  mini-peak on 11/08 reached out and touched the top line again, marking the end of an up-sloping channel dating from the 10/03 low.  After that, the index fell - once again faltering at its mid-line, and bounced off the yellow mid-line of the down-sloping channel on 11/25.  That was last week's surge; it peaked on 11/30, with two days of no follow-through.  Unless there is positive action in the next few days, this increase will have faltered without challenging the channel boundary.   

The heavy red down-slanting line at the top goes back to the peak in 2007.  Longer range views can be seen here and here (second chart.)

Here's another look at the last five years.

The heavy green line slanting up from just below 700 on the ordinate axis connects bottoms all the way back to the early 80's.  The last touch prior to the march '09 piercing was in February 1991.  Should that line fail as support, there is no other support line. 


I truly believe we are witnessing the advent of The New Dark Ages.

Saturday, November 19, 2011

A Slightly Longer View

Here is a look at the SP500 Index since the beginning of August - daily bars.

I've outlined three channel that have been in existence since the 8/09 bottom.  The first, in purple, starts with that bottom.  It was badly breached in late September - early October.  An expanded trend channel, at double the width (not shown) would come close to containing the October 4 low.

The blue channel, up from there, outlines a steep and dramatic retracement.  This trend topped on October 27, and the index has been sliding since.  I've placed the red channel lines around this decline.

I thought the purple channel was gone after the late September drop, but the lower boundary has been touched several times since mid-October.  If the red channel has any validity, this week's penetration of the purple channel bottom signals a new phase of decline.

Looking at the even bigger picture, it's hard to see anything really positive happening.

Thursday, November 3, 2011

Thursday 11-3

Today, nothing definitive happened in Greece.   "Stocks rallied for a second day on Thursday as Greece backed away from a proposed referendum that threatened its membership in the euro, which could destabilize global markets."  So - stocks were strong today because the Greeks decided to not do something that maybe they weren't going to do anyway, and nobody knows what the effects might have been if they had.  Well, stock increases climb a wall of fear and uncertainty, so that all makes very good sense. 

Another way to look at it is that after a five wave decline covering 3 trading days, the markets are now in a corrective phase.   From Thursday's SP500 high of 1292.66, the index bottomed at 1215.42 on Tuesday.  Today's high of 1263.21 is only .06 above the .618 retracement level.  Of course, there is no particular reason for the advance to stop exactly there.  Recent retracement have been quite steep and the .786 level, at 1276.14, is not far off.  The way markets move these days, that could be reached in a few seconds of trading.

If the advance were to end now, it would mean that, once again, it faltered at its trend midline.  That would be esthetically pleasing, at least.   Note also that the open gap from Tuesday's opening has been filled.

If the index doesn't turn down here, I expect it will soon.

Wednesday, November 2, 2011

Wednesday 11-2

On a day when the Fed did nothing, but projected a bleak outlook going forward and no new revelations came out of Europe to relieve the Greecy mess, the stock market went  . . . . . . UP?

Yep: 1.61% for the SP500, 1.53% for the DJI, and a measly 0.87% for the NASDAQ.  How to explain?  Will, since the top last Thursday, the SP500 has complete 5 waves down, and now there is a correction at some small level of trend.

Here is a longer range view of action over the last year and a half.  Again, we see trends within trends and trends faltering at their respective midlines.

The wide channel, outlined in brown, goes back to the 3/6/09 low of 666.79.  Within it is the green channel originating with the 8/31/10 low.  Note that the trend fails exactly where the two trendlines converge.  Yesterday's purple channel is back as well.  Extrapolating its midline back shows that it was a support resistance line during the last throes of the brown and green channels.

The red lines represent horizontal support and resistance levels.